Deng Xiaoping, China's senior leader, passed his last formal leadership post to his chosen successor today, and the Communist Party laid out an austere economic plan for the next two years. Deng, 85, resigned as chairman of the party's powerful Central Military Commission in favor of party chief Jiang Zemin. He still heads the State Military Commission, a virtual mirror of the party group, but said in a letter released today that he will also leave that job.

Troops have pulled out of Beijing in large numbers this week, diplomats said Thursday, but China's Communist Party leaders indicated that martial law in the capital would continue. A city of tents near Shahe airport, outside the capital, has disappeared and troops from the northeastern city of Shenyang sent to put down the student-led democracy movement in June have returned to base.

China's military spending will drop about 6% in real terms this year despite the opposition of some military officers, it was reported Friday. The New China News Agency said officers met with President Yang Shangkun and called for higher defense spending and advanced equipment for the army. Yang denied their requests, saying defense spending would rise only when the economy improves. Yang is vice chairman of the Central Military Commission, which sets military policy.

In a "no-holds-barred exchange," Richard M. Nixon today told Deng Xiaoping that some Chinese leaders have lost respect in the United States, and Deng accused Washington of involvement in the democracy movement that China's army crushed in June. China's 85-year-old senior leader told the former President that "China has not done one single thing harmful to the United States" in the last decade, the New China News Agency reported.

Chinese President Yang Shangkun concluded a four-day visit to Mongolia on Thursday, declaring his trip to the former Soviet satellite state "a complete success." His summit in Ulan Bator with Mongolian President Punsalmaagiyn Ochirbat marked a major expansion of Sino-Mongolian economic, political and cultural ties, virtually severed in the early 1960s when Sino-Soviet relations sharply deteriorated.

In the final years of his life, Deng Xiaoping, following the ancient tradition of the emperors, ruled China indirectly. After resigning his chairmanship of the powerful Military Affairs Commission in 1989, Deng's only remaining official titles were honorary chairman of the Soong Ching-ling Foundation, a charity group, and most honorary chairman of the China Bridge Assn. Yet until his death he continued to be the preeminent power in China, the "paramount leader" of 1.

Bo Yibo, the last of the "Eight Immortals" who led China through the tumultuous 1970s and '80s, has died, the official Xinhua News Agency reported Tuesday. He was 98. Hong Kong's Phoenix Satellite Television said Bo died Monday at a hospital in the Chinese capital. No cause of death was announced. Bo, the father of China's Commerce Minister Bo Xilai, was a veteran of the 1949 communist revolution and a former vice premier.

In the 45 years since the creation of the People's Republic of China, only two men have held undisputed power over this vast land of 1.2 billion people. Communist China's founder, Mao Tse-tung, died in 1976. His ultimate successor at the helm, Deng Xiaoping, frail and no longer capable of speaking in public, turns 90 years old today. Despite several years of rumors that he is dead or dying, Deng stubbornly clings to life.

On the eve of Chinese leader Deng Xiaoping's 85th birthday, the Communist Party stepped up its campaign Monday to cast the ailing leader as China's greatest hero. The state-run press announced the national distribution of a new set of Deng speeches, some dating back 51 years, and all the newspapers published unqualified tributes to the elusive Chinese leader, who has not been seen in public for nearly three months.

Western diplomats said Monday that they believe China's political leadership has now completely collapsed and that Beijing could soon be the scene of a battle between rival armies. According to one diplomatic source, some troops from China's People's Liberation Army are moving from the south towards Beijing, where they apparently intend to confront the PLA's 27th Army. It was the 27th Army that was primarily responsible for the bloody assault on Beijing on Saturday night and early Sunday, and which now apparently controls most of this terrified city.